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HomeMy WebLinkAboutCity of Tamarac Resolution R-2010-020Temp. Reso. # 11754 January 6, 2010 Ra��o y Page 1 of 3 RESOLUTION NO. A RESOLUTION OF THE CITY OF TAMARAC, FLORIDA APPROVING THE THIRD AMENDMENT TO THE COMMUNITY DEVELOPMENT BLOCK GRANT ("CDBG") PROGRAM, FISCAL YEAR 2008 ANNUAL ACTION PLAN NINTH PROGRAM YEAR TO PROVIDE FOR THE REALLOCATION OF FUNDS WITHIN THE CITY'S NEIGHBORHOOD STABILIZATION PLAN ("NSP"); AUTHORIZING AND DIRECTING THE CITY ADMINISTRATION TO TAKE ACTION CONSISTENT WITH THE INTENT OF THIS RESOLUTION; PROVIDING FOR CONFLICT; PROVIDING FOR SEVERABILITY; AND PROVIDING AN EFFECTIVE DATE. ********** WHEREAS, the City of Tamarac ("City") is a Community Development Block Grant ("CDBG") entitlement community; and WHEREAS, in October, 2008, the City received notification of an allocation through the CDBG Neighborhood Stabilization Program in the amount of $4,772,218.00, pursuant to the Housing and Economic Recovery Act (HERA) 2008, from the Department of Housing and Urban Development; and WHEREAS, on November 26, 2008, the City Commission adopted Resolution No. R- 2008-175, which authorized the First Amendment to the Community Development Block Grant ("CDBG") Program, Fiscal Year 2008 Annual Action Plan Ninth Program Year to provide for the adoption of the Neighborhood Stabilization Plan ("NSP"); and WHEREAS, on May 27, 2009, the City Commission adopted Resolution No. R-2009- 72, which authorized the Second Amendment to the Community Development Block Grant ("CDBG") Program, Fiscal Year 2008 Annual Action Plan Ninth Program Year to provide for Temp. Reso. # 11754 January 6, 2010 Page 2 of 3 the allocation of funds received pursuant to the American Recovery and Reinvestment Act of 2009 ("CDBG-R Funds"); and WHEREAS, the Community Development Department has prepared this Third Amendment to the CDBG Fiscal Year 2008 Annual Action Plan Ninth Program Year to provide for the reallocation of funds to be used as part of the City's Neighborhood Stabilization Plan ("NSP"); and WHEREAS, the City Commission finds that it is in the best interest of the citizens and residents of the City of Tamarac to approve this Third Amendment to the CDBG Fiscal Year 2008 Annual Action Plan. NOW THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF TAMARAC, FLORIDA that: SECTION 1: The foregoing "WHEREAS" clauses are hereby ratified and confirmed as being true and correct and are hereby made a specific part of this Resolution. SECTION 2: The City Commission of the City of Tamarac hereby approves the Third Amendment to the CDBG Program Fiscal Year 2008 Annual Action Plan Ninth Program Year for the reallocation of funds used by the City of Tamarac for the Neighborhood Stabilization Program, as attached hereto as Exhibit "A", and incorporated herein by reference. SECTION 3: All appropriate City officials are hereby authorized and directed to take any and all action necessary to effectuate the intent of this Resolution. SECTION 4: All resolutions or parts of resolutions in conflict herewith are hereby repealed to the extent of such conflict. 1 I F�] 1 Temp. Reso. # 11754 January 6, 2010 Page 3 of 3 SECTION 5: If any clause, section, other part or application of this Resolution is held by any court of competent jurisdiction to be unconstitutional or invalid, in part or application, it shall not affect the validity of the remaining portions or applications of this Resolution. SECTION 6: This resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED BY THE CITY COMMISSION OF THE CITY OF TAMARAC, FLORIDA THIS Id DAY OF , 2010. ATTEST: I HEREBY CERTIFY that I Have approved this RES UTION as to form. CITY ATTORNEY B. TALABISCO P. BUSHNELL P. ATKINS-GRAD D. GLASSER H. DRESSLER SSG:DNT:dnt H:\2005\050164 TAMARAORESO 2010\TR 11754 (NSP - Third Amendment).doc CITY OF TAMARAC FY 2008-2009 Neighborhood Stabilization Program (NSP) Substantial Action Plan Amendment through the U.S. Department of Housing and Urban Development (HUD) under the Community Development Block Grant (CDBG) Program Prepared by: City of Tamarac Community Development department Housing Division 7525 NW 88th Avenue Tamarac, FL 33321 www.tamarac.org Original Submission December 2008 NSP Amendment — January 2010 (3rd to FY 2008-2009 Annual Action Plan) TABLE OF CONTENTS A. Areas of Greatest Need B. Distribution and Uses of Funds C. Definitions and Descriptions D. Low Income Targeting E. Acquisition & Relocation F. Public Comment G. NSP Information by Activity H. Total Budget I. Performance Measures Palle 4 6 6 8 9 9 10 15 16 NEIGHBORHOOD STABILIZATION PROGRAM (NSP) SUBSTANTIAL AMENDMENT- December 2008 NSP Amendment — January 2010 Jurisdiction: City of Tamarac, FL Website: www.tamarac.o NSP Contact Person: Address: Telephone # Fax # Email: Angela Bauldree 7525 NW 88 Avenue Tamarac, FL 33321 (954) 597-3539 (954) 597-3540 angelab a-tamarac.org This section will address the specific requirements set forth in: Federal Register Part III — Department of Housing and Urban Development Notice of Allocations, Application Procedures, Regulatory Waivers Granted to and Alternative Requirements for Emergency Assistance for Redevelopment of Abandoned and Foreclosed Homes Grantees under the Housing and Economic Recovery Act, 2008; Notice And Public law 110-289 — July 30, 2008 Title III -Emergency Assistance for the Redevelopment of Abandoned and Foreclosed Homes Section 2301 Additionally, any other requirements and regulations handed down by the Department of Housing and Urban Development (HUD) will also be adhered to. The City of Tamarac was allocated $4,772,218.00 from the Neighborhood Stabilization Program funded in September 2008. Below describes the City's plan to utilize these funds and addresses the substantial action plan amendment requirements of Section 2301 ( c) 2 ) of Housing Economic Recovery Act, 2008 (HERA). A. AREAS OF GREATEST NEED Provide summary needs data identifying the geographic areas of greatest need in the grantee's jurisdiction. Tamarac has approximately 1,400 properties in some state of foreclosure for any given month, consisting of 200-350 bank owned properties. Several factors were used when determining the areas of greatest need within the City's jurisdictional boundaries. Two sources of data were used to determine areas of greatest need within the City. HUD Data reported an estimated foreclosure risk score by census tract as well as an 18 month predicted underlying problem of foreclose rate. With this information, the City determined that most of the areas with a Estimated Foreclosure Abandonment Risk score of 10 or Predicted 18 Month Underlying Problem Foreclosure rate of 10% or higher where the same areas identified by the second data source so as to confirm the areas of greatest need. These census tracts are as follows: 502.02 503.05 204.06 204.10 601.05 601.06 601.07 601.12 The second source of data was Foreclosure Logic, a website that provides foreclosure data by area. With the data from this website, our GIS division was able to extract two important factors: • % of bank owned foreclosed properties within each residential sub- division. • % of total foreclosures (properties at any stage of foreclosure) within each residential sub -division. To identify areas of greatest need, a threshold of 15% combined foreclosure rate within any given sub -division was set. This figure represents the percentage of foreclosures at any stage, and bank owned foreclosures that have reached 15% of the total units within the sub -division. The census tracts for these sub -divisions are as follows: 502.02 503.05 204.06 204.10 601.06 601.11 601.12 Aside from obvious key factors relating to the sub -prime mortgage crisis (interest only loans, balloon loans, adjustable rate loans (ARM), and other predatory loans) Tamarac sees other patterns affecting current foreclosure numbers. One clear factor was that several of the sub -divisions within Tamarac that have higher rates of foreclosure than others are also the same ones that were severely affected during the 2005 hurricane season. These sub -divisions had homes damaged worse than those in other areas of the City. Additionally they may have endured increases in association fees, assessment fees and insurance hikes. Sub -divisions identified that exceed a 15% threshold of foreclosures are as follows: Jasmine at Tamarac 57% Cypress Walk 51 % Westwood Condominium 42% Southgate Condominium 30% Arbor Keys 28% Heathgate 28% Riverside 24% PRD Subdivision 21 % Lakeside 19% Shaker Village 17% Catalina Isles 16% Caporella Townhomes 16% The census tracts identified as areas of greatest need are as follows and will be areas to which the activities are allowed: 502.02 503.05 204.06 204.10 601.05 601.06 601.07 601.11 601.12 B. DISTRIBUTION AND USES OF FUNDS Provide a narrative describing how the distribution and uses of the grantee's NSP funds will meet the requirements of Section 2301(c)(2) of HERA that funds be distributed to the areas of greatest need, including those with the greatest percentage of home foreclosures, with the highest percentage of homes financed by a subprime mortgage related loan, and identified by the grantee as likely to face a significant rise in the rate of home foreclosures. Distribution of funds to the identified areas of greatest need will be accomplished by providing down payment/subsidy and rehabilitation assistance to those purchasing in areas of greatest need as listed above is Section A. The data collected by both HUD and Foreclosure Logic addresses the three stipulated categories as well as other factors indicated above. The City anticipates assisting approximately 60 households in the purchase and rehabilitation of foreclosed properties. C. DEFINITIONS AND DESCRIPTIONS Definition of "blighted structure" in context of state or local law. 1) Blighted Structure: A structure is blighted when it exhibits objectively determinable signs of deterioration sufficient to constitute a threat to human health, safety, and public welfare. Properties identified for demolition will meet one or more of the following criteria as a blighted structure: 1. Building Deterioration 2. Site Deterioration or site deficiencies 3. Unsanitary and unsafe conditions and incompatible uses 4. Six or more ownership parcels per block 5. Buildings greater than 40 years of age 6. Presence of closed/vacant buildings 7. Presence of vacant lots 8. Buildings in violation of property maintenance code violations 9. Presence of buildings scheduled for demolition Definition of "affordable rents' : Note: Grantees may use the definition they have adopted for their CDBG program but should review their existing definition to ensure compliance with NSP program -specific requirements such as continued affordability. 2) Affordable Rents: Those requiring not more than 30 percent of an income cutoff defined in relation to Low -Moderate Area Median Income (AMI). Tamarac is not implementing any rental activity with NSP funds. Describe how the grantee will ensure continued affordability for NSP assisted housing. 3) Continued Affordability Each activity will have a deferred loan component as follows to encourage residents to stay in their homes for an extensive affordability time period: Financial Mechanism Down Payment/Subsidy Assistance 30 Years Total Years 1 — 5 Not Prorated 10% Shared Equity Years 6 —10 Not Prorated 5% Shared Equity Years 11- 30 Prorated down 5% each year Rehabilitation after Down Payment/Subsidy Assistance 15 Years Maximum <$15,000 5 Year Deferred Loan Year 1 — 5 Prorated 20% per year $15,000 - $40,000 10 Year Deferred Loan Years 1 — 5 Not Prorated Years 6 —10 Prorated 20% per year >$40,000 15 Year Deferred Loan Years 1 — 5 Not Prorated Years 6 — 15 Prorated 10% per year Describe housing rehabilitation standards that will apply to NSP assisted activities. 4) Housing Rehabilitation Standards All housing rehabilitation work will follow Broward County Housing Standards, and Florida Building Code as well as City Code. D. LOW INCOME TARGETING Identify estimated amount of funds appropriated or otherwise made available under the NSP to be used to purchase and redevelop abandoned or foreclosed upon homes or residential properties for housing individuals or families whose incomes do not exceed 50 percent of area median income: , . 0 NSP Amendment — January 2010: $1,615,000.00 Specific appropriations to households whose income does not exceed 50% AMI will be implemented in two tiers: 1) Down Payment/Subsidy Assistance A household whose income is below 50% AMI will be eligible to receive up to 70% of the purchase price in assistance funds. That amount is estimated based on the average cost of a Tamarac property of $164,000 to be approximately $114,000 in down payment/subsidy. 2) Rehabilitation Assistance A household whose income is below 50% AMI will be eligible to receive up to $60,000 towards the rehabilitation of a foreclosed upon property purchased through the down payment/subsidy assistance activity. This tier will be added to tier #1 on properties that require rehabilitation; some properties will not require rehabilitation work. The Area Median Income chart for Broward County is as follows: Florida 2008 Miami -Fort Lauderdale -Miami Beach MSA Fort Lauderdale HMFA Family 1 2 3 4 5 6 7 8 50% 24,900 28,500 32,050 35,600 38,450 41,300 44,150 47,000 80% 39,850 45,550 51,250 56,950 61,500 66,050 70,600 75,150 Median: 64,000 120% 59,760 68,400 76,920 85,440 92,280 99,120 105,960 112,800 E. ACQUISITION & RELOCATION Indicate whether grantee intends to demolish or convert any low and moderate income dwelling units (i.e., <80% of area median income). The city will not be undertaking any acquisition and relocation activities. F. PUBLIC COMMENT Provide a summary of public comments received to the proposed NSP Substantial Amendment. Advertisement for 15-day review period on Action Plan November 9, 2008 proposed NSP activities Beginning of 15-day public review period November 11, 2008 End of 15-day public review period November 25, 2008 No comments received during public review period. Public Hearing with City Commission for approval of NSP activities November 26, 2008 No comments received during November 26th public hearing. Beginning of 2"d 15 day public review period End of 2"d 15 day review period No comments received during 2"d public review period. Beginning of 30-day public review period- NSP Amendment End of 30-day public review period- NSP Amendment comments received during public review period. NSP Amendment City Commission Approval & Public Hearing _comments received during February 10th Public Hearing. December 10, 2008 December 24, 2008 January 10, 2010 February 10, 2010 February 10, 2010 NSP INFORMATION BY ACTIVITY All activities will begin once notice to proceed has been received from the Department of Housing and Urban Development (HUD). Per HUD, at the Washington Summit, HUD expects to respond to all applicants by February 2009. The activities will begin at that point with an 18 month time frame for commitment of funds. 1) Activity Name: Financing Mechanism -Down Payment/Subsidy Assistance Activity Type: NSP Eligible Use CDBG Eligible Activity Financing Mechanism 24 CFR 570.201(a) Direct Homeownership Assistance National Obiective: Benefit to low -moderate income persons -housing activity. Project Start Date: February 1, 2009 Project End Date: July 31, 2010 Encumbrances and approval of eligible households to be made within the eighteen month timeframe. Responsible Organization: The City's Housing Division will administer this activity in-house. Location Description: Eligible applicants will be required to purchase foreclosed properties within the specified areas of greatest need listed in below. (scattered site locations). Census Tracts: 502.02 503.05 204.06 204.10 601.05 601.06 601.07 601.12 Activity Description: This activity is to assist first time homebuyers with the purchase of a foreclosed property. The financial assistance will be in the form of down payment assistance and subsidy assistance to bridge the gap between the first mortgage ability and purchase price. The front end mortgage ratio should not exceed 32% of a household's income. Total assistance amount is as follows: 50% AMI and below Up to 70% Purchase Price 51 % - 80% AMI Up to 40% Purchase Price 81 % - 102% AMI Up to 10% Purchase Price Deferred Loan-30 Years Total Years 1 — 5 Not Prorated 10% Shared Equity Years 6 —10 Approximate NSP # of units Amend. Units 10 Units 1-un+ts 28 Units 39 s 3 Units Not Prorated 5% Shared Equity Years 11- 30 Prorated down 5% each year Housing Counseling services will be contracted out to HUD approved Counseling agencies to meet the 8-hour required training for each homebuyer. Additional real estate services may also be included in this activity to assist eligible homebuyers in locating foreclosed upon residential properties, as well as locating the seller or seller's agent. All eligible home buying applicants will be educated on negotiations with regard to discounts. Several considerations by the applicant may help determine the amount of the discount such as length of time on the market (carrying costs), condition of the property, costs associated with rehabilitation that may be required, and other contributing factors. During the Realtor Workshop, as well as all Workshops and contact with homebuyers, staff will stress the importance of discounts and work with all parties to be sure discounts are considered to their maximum abilities. NSP Amendment— January 2010 Per Docket No. 5255-N-02, this discount requirement has been reduced to 1 percent from the current market appraised value. 5 but be limited te:. ta nelude, net gee, maantenanee, marketing, overhead NSP Amendment -January 2010 As a result of Docket No. FR-5255-N-02, all language originally referring to discounts will be deleted. Docket No. 5255-N-02 eliminates the 15 percent aggregate discount requirement in Section Q.1.b of the October 6, 2008, original notice. HUD reduced the minimum individual discount requirement from 5 percent to 1 percent. The City may conduct Housing Seminars to homebuyers after the eligibility process to educate them on the program, home buying process, lending guidelines, rehabilitation options, and any other home buying related activities. Due to the fact this program will be available to City employees, Housing staff will ensure proper procedural adherence to the Department of Housing and Urban Development's Conflict of Interest regulation 24 CFR 570.611. All employee applications seeking assistance under the NSP program will be forwarded to the local Miami HUD Field Office requesting an "exception" on a case -by -case basis approving said employee for assistance. 2) Activity Name: Financing Mechanism -Down Payment / Subsidy / Rehabilitation Assistance Activity Type: NSP Eligible Use CDBG Eligible Activity Financing Mechanism 24 CFR 570.201(a) Direct Homeownership Assistance National Objective: Benefit to low -moderate income persons -housing activity. Project Start Date: February 1, 2009 Project End Date: July 31, 2010 Encumbrances and approval of eligible households to be made within the eighteen month timeframe. Responsible Organization: The City's Housing Division will administer this activity in-house. Location Description: Eligible applicants that have purchased foreclosed properties within the areas of greatest need listed below. (scattered site locations). Census Tracts: 502.02 503.05 204.06 204.10 601.05 601.06 601.07 601.12 Activity Description: This activity is to assist first time homebuyers with the purchasing of a foreclosed property which also requires rehabilitation. The financial assistance will be in the form of down payment assistance and subsidy assistance to bridge the gap between the first mortgage ability and purchase price followed by additional rehabilitation funds to bring the property up to current code/building standards. This property will be brought up to current building code standards, address any code deficiencies, as well as be equipped with energy star products. Total assistance amount is as follows: Up to $60,000.00 per property. AppFex. 36 PCs NSP Amendment — Approx. 41 Units Deferred Loan 15 Years Maximum <$15,000 5 Year Deferred Loan Year 1 — 5 Prorated 20% per year $15,000 - $40,000 10 Year Deferred Loan Years 1 — 5 Not Prorated Years 6 —10 Prorated 20% per year >$40,000 15 Year Deferred Loan Years 1 — 5 Not Prorated Years 6 —15 Prorated 10% per year Due to the fact this program will be available to City employees, Housing staff will ensure proper procedural adherence to the Department of Housing and Urban Development's Conflict of Interest regulation 24 CFR 570.611. All employee applications seeking assistance under the NSP program will be forwarded to the local Miami HUD Field Office requesting an "exception" on a case -by -case basis approving said employee for assistance. 3) Activity Name: Demolition Activity Type: NSP Eligible Use CDBG Eligible Activity Demolition 24 CFR 570.201(d) National Objective: Spot Blight Project Start Date: February 1, 2009 Project End Date: July 31, 2010 Encumbrances will be made within the eighteen month time frame. Responsible Organization: The City's Housing Division will administer this activity in-house. Location Description: Scattered site locations as determined by Code Compliance Division, Building Department and Unsafe Structure Board that are located within the areas of greatest need listed below. Census Tracts: 502.02 503.05 204.06 204.10 601.05 601.06 601.07 601.12 Activity Description: This activity will address the need to demolish an abandoned or foreclosed property that exhibits objectively determinable signs of deterioration sufficient to constitute a threat to human health, safety, and public welfare. A lien will be placed on the property for the amount of demolition. Demolition will only occur in the case of abandoned/vacant residential properties. No occupied structures will be demolished utilizing NSP funds, therefore, relocation assistance will not be necessary. Properties identified for demolition will meet one or more of the following criteria as a blighted structure: 1. Building Deterioration 2. Site Deterioration or site deficiencies 3. Unsanitary and unsafe conditions and incompatible uses 4. Six or more ownership parcels per block 5. Buildings greater than 40 years of age 6. Presence of closed/vacant buildings 7. Presence of vacant lots 8. Buildings in violation of property maintenance code violations 9. Presence of buildings scheduled for demolition Approximately 6 Units NSP Amendment - Approximately 1 Unit G. TOTAL BUDGET ELIGIBLE ACTIVITY A. Financing Mechanisms < 50% AMI 51% AMI -120% AMI TOTAL Financial Assistance to income eligible households for down payment/subsidy assistance. $1,129,000.00 $1,496,000.00 $2,625,000.00 Delivery of Services costs associated with activity to be factored into each household assistance. Financial Assistance to income eligible households for down payment/subsidy with home rehabilitation assistance. $486,000.00 $1,286,218.00 $1,772,218.00 Delivery of Services costs associated with activity to be factored into each household assistance. D. Demolition Program Administration $360,000.00 34% of Allocation to 50% or below AMI requirement = $1,615,000.00 TOTAL $1,615,000.00 $2,797,218.00 $4,772,218.00 Demolition of blighted structures. $15,000.00 $15,000.00 The program administration of the Neighborhood Stabilization Program will be handled in- house by the existing staff which is comprised of a full-time Housing Administrator and full- time Housing Coordinator and two additional full-time temporary positions that will be 100% dedicated to the NSP activities. The appropriate portion of salaries of the existing positions will be drawn based on the percentage of time spent on the NSP activities. Program Income NSP Amendment -January 2010 As a result of the Technical Revisions published by the U.S. Department of Housing and Urban Development (HUD) dated June 19, 2009, Docket No. FR-5255-N-02, all references to program income is revised to comply with said document. Program Income generated from the activities within thin application (Financing Mechanisms for Purchase Subsidy and Home Rehabilitation) shall be used in accordance with the provisions of Section 2301 of the Housing and Economic Recovery Act of 2008. Program Income generated by activities carried out pursuant to Section 2301(c) (3)(13) and (E). a) Program Income received before July 30, 2013, may be retained by the state or unit of general local government if it is treated as additional CDBG funds and used in accordance with the requirements of Section 2301. b) As per Docket No. FR-5255-N-02, program income received after July 30, 2013 is not required to be returned to HUD for deposit in the Treasury. Program Income received after 2013 will be returned into eligible activities approved by HUD that prove to sustain the intent of the Neighborhood Stabilization Program. However, the program income requirements of the CDBG program are still applicable to income directly generated from the use of NSP funds are received by grantees or sub recipients. PERFORMANCE MEASURES Activity Financing Mechanism -Down Payment/Subsidy Assistance Approx. NSP Amend 50% AMI and below Up to 70% Purchase Price 8 Units 10 Units 51 % - 80% AMI Up to 40% Purchase Price 13 Units 28 Units 81 % - 102% AM Up to 10% Purchase Price 39 Unit 3 Units Activity Financing Mechanism -Down Payment / Subsidy / Rehabilitation Assistance Approx. NSP Amend Total Number of units all income categories Sits 41 Units Activity Demolition Total Number of properties REPORTING Approx. NSP Amend. 6 PFeperties 1 Property NSP activities will be reported utilizing the DRGR system as required by the Department of Housing and Urban Development (HUD). Quarterly reports documenting number of units, households by income, expenditures, and other NSP/DRGR related information will be completed by the Housing Division.